Company announcement third quarter 2023 report: 2023Q1-3 deducting non-homing net profit increased by 11.51% compared with the same period last year.

1) 2023Q1-3 realized revenue of 6.371 billion yuan, down 4.14% from the same period last year; realized net profit of 1.539 billion yuan, down 23.75% from the same period last year; realized net profit of 1.418 billion yuan, up 11.51% from the same period last year; realized gross profit of 40.56%, up 2.12pct from the same period last year; realized net interest rate of 24.15%, down 6.13pct from the same period last year; and realized investment income of 642 million yuan, down 55.08% from the same period last year. The year-on-year decline in investment income is higher than the same period last year, mainly due to base factors. 2022Q3, the joint venture of the company has completed the procedure of reducing capital, and the corresponding premium enjoyed by the company has been transferred from capital reserve to investment income, leading to an increase of 921 million yuan in investment income. Excluding the impact of the investment income, the company's parent net profit 2023Q1-3 achieved an increase of 15.94% compared with the same period last year. 2) quarter by quarter: 23Q3 achieved revenue of 2.246 billion yuan, down 11.98% from the same period last year; realized net profit of 610 million yuan, down 47.87% from the same period last year; realized gross profit margin of 41.84%, an increase of 4.14pct over the same period last year, and an increase of 1.75pct over Q2; achieved a net profit rate of 27.14%, down 18.48pct from the same period last year, and an increase of 5.23pct over Q2.

Toll road business: the traffic flow and the average daily toll income in Guangdong have increased steadily. By region: 2023Q1-3 1) Guangdong-Shenzhen area: Meiguan Expressway / East Section / West Section / Yangtze River Project / Outer Ring Project / Longda Expressway / Shuiguan Expressway / Shuiguan extension Section achieved a year-on-year growth rate of 18.12% / 12.72% / 16.58% / 32.39% / 28.03% / 18.57% / 13.50% / 18.18%, respectively. The average daily toll income increased by 12.50% / 6.75% / 16.00% / 27.54% / 25.38% / 17.63% / 10.22% / 14.89% respectively over the same period last year. 2) Guangdong Province-other regions: Qinglian Expressway / Guangzhou-Shenzhen Expressway / West Line Expressway / Yangmao Expressway / Guangzhou West second Ring Road respectively achieved a year-on-year growth rate of 10.64% / 17.13% / 17.32% / 23.40% / 21.33% respectively; the average daily toll income increased by 6.81% / 19.95% / 15.69% / 20.08% / 15.64% respectively. 3) other provinces in China: Yichang Project / Changsha Ring Road / Nanjing third Bridge achieved a year-on-year growth rate of-1.52% / 65.52% /-54.55% respectively, and daily toll income increased by 10.65% /-34.94% / 120.79%, respectively.

Large environmental protection plate: the industrial strategic layout is becoming more and more perfect. 1) Clean energy: in terms of wind power business, four wind power projects 2023Q1-3 completed 125.68 million megawatts of grid power, with a wind power business income of 504 million yuan. 2) solid waste resource treatment: in terms of organic waste treatment business, the total organic waste treatment volume from January to September is 874600 tons, with a total income of 413 million yuan.

Investment advice: 1) We maintain the previous profit forecast, the company is expected to achieve return net profit of 24.6,27.4 and 2.96 billion yuan in 2023-2025, corresponding to 1.13,1.26 and 1.36 yuan EPS respectively in 2023-2025, PE is 9,8,7 times, the target price is 10.9 yuan, continue to be optimistic about the company's dual-main business promotion, continue to enhance the value of the industrial chain, and maintain the "recommended" rating.

Risk tips: affected by the epidemic, traffic declined more than expected, environmental protection projects landed less than expected and so on.